Metro condo price slump continues

Residential property prices in the Philippines rose marginally in the fourth quarter of 2020, recovering from a steep decline in the three prior months induced by the economic uncertainties associated with the coronavirus pandemic, according to the central bank.

Data released by the Bangko Sentral ng Pilipinas showed, however, that prices in the real estate sector in the country’s biggest market, the National Capital Region, continued to soften, extending price declines across various categories for the second consecutive quarter.

In a statement, the central bank said residential real estate prices of various types of new housing units in the Philippines recovered in the final quarter of last year based on the Residential Real Estate Price Index. In particular, the price growth of houses reverted to positive territory as the price index rose by 0.8 percent year-on-year. The growth in the overall residential property prices was driven mainly by those in areas outside Metro Manila, which grew by 5.9 percent.

4.8% contraction

Prices across all types of housing units in provincial areas, except for the prices of condominium units, rose in the fourth quarter. “Meanwhile, the slump in property prices in the National Capital Region continued for the second consecutive quarter, contracting by 4.8 percent in the fourth quarter,” the central bank said, adding that the decrease in the prices of condominium units in Metro Manila outweighed the increase in the prices of duplexes, townhouses and single detached or attached houses.

Postponement of launch

Prices of duplexes, townhouses and single detached or attached houses rose in the fourth quarter of 2020 by 20 percent, 16.1 percent, and 4.7 percent, respectively, while prices of condominium units contracted by 8.4 percent during the period. “This is the second consecutive quarter that condominium prices declined,” the central bank said.

“The decrease in the prices of condominium units in both [Metro Manila] and [provincial areas] may be attributed to the postponement of new launches by developers and lackluster demand for transient dwelling amid the pandemic.” During the fourth quarter of last year, the number of real estate loans granted for all types of new housing units in the Philippines declined by 3.6 percent.

A similar trend was observed in Metro Manila while more property loans were granted in provincial areas. Central bank data showed that the average appraised value per square meter (sq m) of new housing units in the country contracted by 16.8 percent during the period. In both Metro Manila and provincial areas, the average appraised value per sq m of new properties declined on an annual basis. In particular, lower average appraised value per sq m was registered in condominium units. INQ